General Motors (NYSE:GM) has announced an investment of $500 million in Lyft Inc., which brings the valuation of the startup directly competing against Uber to an impressive $5.5 billion.
General Motors’ investment in the Lyft is a portion of a $ 1 billion financing round for the startup. This investment represents one off the largest investments of a car manufacturer into, what is called, the ride-hailing industry.
Dan Ammann, president of General Motors, said in a statement, “change more in the next five years than it has in the last 50 and we obviously want to make sure we’re at the forefront of that change.”
What Dan Ammann refers to is self-driving cars, which is a technology that has become the focus of major research and developments efforts among several companies, including Tesla (NASDAQ:TSLA) and Google (NASDAQ:GOOGL).
John Zimmer, Lyft’s president and co-founder, Our objective is to reshape the future of mobility," Amman said of the company's investment in Lyft. "We strongly believe that the introduction of self-driving cars will come through a network -- meaning that you will request a Lyft in the future and a self-driving car will arrive and bring you where you need to go."